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I wonder how anyone at all expected this to turn out. So, businesses had to stop operating. GDP and income earned and spent, dropped. This by definition results

I wonder how anyone at all expected this to turn out. So, businesses had to stop operating. GDP and income earned and spent, dropped. This by definition results in someone becoming poor - with or without bailout - the government does not have any of "its own" money - all money it can possibly distribute is taken from taxpayer's pockets. Call me cynical, but people working in the service industry were the safest ones to let fail without causing domino effect - they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008.

deleted 6y ago
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cinquemb 6y ago
> they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008. Yeah, well you are forgetting the people they were renting from have mortgages… 2008 will be a cake walk compared to this… can't "extend and pretend" forever…
uoaei 6y ago
> the government does not have any of "its own" money - all money it can possibly distribute is taken from taxpayer's pockets This is absolutely not the case. The government owns and operates a mint, and we haven't been on the gold standard since Nixon. There is no zero-sum double-entry accounting when it comes to sovereign fiat currencies. If you analyze the monetary policy of the federal government like it's a family balancing a checkbook, you are buying right into the rhetoric that keeps the peanut gallery shrieking "but the deficit!" and prevents us from actually investing in the public's health and needs. Federal deficit is public surplus. It is the federal government investing in its citizens in the most literal way possible. > Call me cynical, but people working in the service industry were the safest ones to let fail without causing domino effect - they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008. That's not cynical, that's sociopathic.
- rayiner 6y ago
  I'm glad the left has moved right on over to "money doesn't exist." That'll end well.
  - uoaei 6y ago
    Every dollar bill is an IOU from the federal government. It says so right on the paper bill: "This note is legal tender." Money only means something if people believe it means something. I can make up a new currency but if no one believes it has value, then it does not. Any and every economist you find will tell you the same. With this sort of flexibility you are forced to abandon the zero-sum style of monetary policy, and you open up a lot of new possibilities for how to interact with the flows of monies. Republicans who shriek about the deficit know this, too, but keep their rhetoric the same because they and their friends benefit from the general public believing that the federal government works like "a family at the kitchen table," because they can shut down any talk of federal spending by pointing to that boogeyman.
    - rayiner 6y ago
      Explain why the EU (and countries like Germany) impose tight limits on budget deficits.
      - uoaei 6y ago
        Sure! First you will have to support your claim that they do so.
        f00zz 6y ago
        Before the current crisis Germany had several years of budget surpluses.
        uoaei 6y ago
        ...and the other member states had significant budget deficits. It is unhelpful to look at countries in isolation because the Euro is what ties all their fiscal policies together.
ketzo 6y ago
> all money it can possibly distribute is taken from taxpayer's pockets. This is the insanely reductive view of government spending that allows the Republican party to float austerity measures in the worst economic times since the Depression. Taxes are not the only place that government money comes from. How would that even make sense? What do you think the Federal Reserve even does? Why do you think we have a national debt? The government is absolutely able to create money out of essentially thin air when called for -- the question is whether we need to wring our hands about increasing the national debt of the largest economy on earth while people are starving in the streets.
- uoaei 6y ago
  Taxes are not the place where government money comes from, period. Taxes are charges to pull money out of circulation so inflation doesn't fall into a positive feedback loop. Taxes have nothing to do with the amount of money that the government can spend at one time. The only thing limiting that is the threat of a sharp devaluation of the currency, and even that is not as big an issue as you might think because countries all over the world are still filling their reserves with dollars.
- anovikov 6y ago
  Well there is a limit on that amount of money. I mean, currently only around 100% of one annual GDP has been printed this way. And this money is still debt - it eats into wealth and incomes of the future retirees i.e. those same people who are now going unemployed - they are borrowing from themselves by getting those benefits - because a larger debt now means higher interest payments later (and these of course go to the rich, included but not limited, rich Chinese, but mainly rich Americans), and limiting what the government can pay to the same people in form of say, social security payments when they get old. This money still doesn't come from nowhere. Or, it increases risk of default when everyone's savings will be wiped out - except most of the money the rich have are again, in stocks so these won't be impacted nearly as much... Whatever way it goes, these are not free money. Call me a conservative but stuff just doesn't come for free. I wonder why is this difficult to grasp - i mean OK, the virtual capital (e.g. startup valuations, or even stock market values) MAY come from nowhere, because they can just equally return to nowhere - these can be pumped to infinity. But we are speaking of consumption money for people living hand to mouth - whatever dollar is given to them, goes to very material consumption. Where this extra stuff will come from, if people don't work more for them to be created? It just doesn't appear out of nowhere if Fed prints some bucks.
zrail 6y ago
> all money it can possibly distribute is taken from taxpayer's pockets. This is a facile understanding of how government spending actually works. The US Federal government _creates_ money. Just up and makes it, essentially out of thin air. Congress could have, had they felt like cooperating, printed ten trillion dollars and given every single person in the US a semi-weekly $1000 direct deposit to get everyone through. Keynesian spending is only a problem during inflationary times, but in the middle of a pandemic when tens of millions of people are told they cannot work _is not one of those times_. Ultimately Congress (i.e. Senate Republicans) decided that 8 million people thrown into poverty and 300,000 needless deaths are better than actually doing anything.
mrzimmerman 6y ago
It's been commented already, but I have to say you have, not a simplistic way of viewing how the federal government handles spending and money, but a completely wrong view of it. It's appalling this comment hasn't been downvoted into oblivion with how wrong and uninformed it is. I think you should start reading here and consider an economics textbook to follow: https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States#Money_creation https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_...

deleted 6y ago

[deleted]

cinquemb 6y ago

> they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008. Yeah, well you are forgetting the people they were renting from have mortgages… 2008 will be a cake walk compared to this… can't "extend and pretend" forever…

uoaei 6y ago

> the government does not have any of "its own" money - all money it can possibly distribute is taken from taxpayer's pockets This is absolutely not the case. The government owns and operates a mint, and we haven't been on the gold standard since Nixon. There is no zero-sum double-entry accounting when it comes to sovereign fiat currencies. If you analyze the monetary policy of the federal government like it's a family balancing a checkbook, you are buying right into the rhetoric that keeps the peanut gallery shrieking "but the deficit!" and prevents us from actually investing in the public's health and needs. Federal deficit is public surplus. It is the federal government investing in its citizens in the most literal way possible. > Call me cynical, but people working in the service industry were the safest ones to let fail without causing domino effect - they are already poor so they don't have mortgages to default onto - they can't afford even in good times - and that avoids a major risk of repeating 2008. That's not cynical, that's sociopathic.

rayiner 6y ago
I'm glad the left has moved right on over to "money doesn't exist." That'll end well.
- uoaei 6y ago
  Every dollar bill is an IOU from the federal government. It says so right on the paper bill: "This note is legal tender." Money only means something if people believe it means something. I can make up a new currency but if no one believes it has value, then it does not. Any and every economist you find will tell you the same. With this sort of flexibility you are forced to abandon the zero-sum style of monetary policy, and you open up a lot of new possibilities for how to interact with the flows of monies. Republicans who shriek about the deficit know this, too, but keep their rhetoric the same because they and their friends benefit from the general public believing that the federal government works like "a family at the kitchen table," because they can shut down any talk of federal spending by pointing to that boogeyman.
  - rayiner 6y ago
    Explain why the EU (and countries like Germany) impose tight limits on budget deficits.
    - uoaei 6y ago
      Sure! First you will have to support your claim that they do so.
      - f00zz 6y ago
        Before the current crisis Germany had several years of budget surpluses.
        uoaei 6y ago
        ...and the other member states had significant budget deficits. It is unhelpful to look at countries in isolation because the Euro is what ties all their fiscal policies together.

ketzo 6y ago

> all money it can possibly distribute is taken from taxpayer's pockets. This is the insanely reductive view of government spending that allows the Republican party to float austerity measures in the worst economic times since the Depression. Taxes are not the only place that government money comes from. How would that even make sense? What do you think the Federal Reserve even does? Why do you think we have a national debt? The government is absolutely able to create money out of essentially thin air when called for -- the question is whether we need to wring our hands about increasing the national debt of the largest economy on earth while people are starving in the streets.

uoaei 6y ago
Taxes are not the place where government money comes from, period. Taxes are charges to pull money out of circulation so inflation doesn't fall into a positive feedback loop. Taxes have nothing to do with the amount of money that the government can spend at one time. The only thing limiting that is the threat of a sharp devaluation of the currency, and even that is not as big an issue as you might think because countries all over the world are still filling their reserves with dollars.
anovikov 6y ago
Well there is a limit on that amount of money. I mean, currently only around 100% of one annual GDP has been printed this way. And this money is still debt - it eats into wealth and incomes of the future retirees i.e. those same people who are now going unemployed - they are borrowing from themselves by getting those benefits - because a larger debt now means higher interest payments later (and these of course go to the rich, included but not limited, rich Chinese, but mainly rich Americans), and limiting what the government can pay to the same people in form of say, social security payments when they get old. This money still doesn't come from nowhere. Or, it increases risk of default when everyone's savings will be wiped out - except most of the money the rich have are again, in stocks so these won't be impacted nearly as much... Whatever way it goes, these are not free money. Call me a conservative but stuff just doesn't come for free. I wonder why is this difficult to grasp - i mean OK, the virtual capital (e.g. startup valuations, or even stock market values) MAY come from nowhere, because they can just equally return to nowhere - these can be pumped to infinity. But we are speaking of consumption money for people living hand to mouth - whatever dollar is given to them, goes to very material consumption. Where this extra stuff will come from, if people don't work more for them to be created? It just doesn't appear out of nowhere if Fed prints some bucks.

zrail 6y ago

> all money it can possibly distribute is taken from taxpayer's pockets. This is a facile understanding of how government spending actually works. The US Federal government _creates_ money. Just up and makes it, essentially out of thin air. Congress could have, had they felt like cooperating, printed ten trillion dollars and given every single person in the US a semi-weekly $1000 direct deposit to get everyone through. Keynesian spending is only a problem during inflationary times, but in the middle of a pandemic when tens of millions of people are told they cannot work _is not one of those times_. Ultimately Congress (i.e. Senate Republicans) decided that 8 million people thrown into poverty and 300,000 needless deaths are better than actually doing anything.

mrzimmerman 6y ago

It's been commented already, but I have to say you have, not a simplistic way of viewing how the federal government handles spending and money, but a completely wrong view of it. It's appalling this comment hasn't been downvoted into oblivion with how wrong and uninformed it is. I think you should start reading here and consider an economics textbook to follow: https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_States#Money_creation https://en.wikipedia.org/wiki/Monetary_policy_of_the_United_...